Archive for the ‘Budgets’ Category

Just a reminder that today is September 1st and a perfect time to get your budget up and running. My wife and I start our budget officially on the 5th of every month because that’s when I get paid. Just remember, it doesn’t have to be perfect! Getting started is the main thing. Each month you’ll improve a little and after a while, your budget will be easy to maintain.

In my last post, I covered why most budgets don’t work and how to fix them. One of the ways to make your budget work is to create a zero-based budget. Today’s post outlines how to create your first zero-based budget. Over the next few weeks I’ll be addressing various aspects of creating and managing a budget. Let’s start with the basics. Some of these steps may seem obvious or simplistic. But for those who just can’t seem to get a budget started, I hope to give you some step-by-step detail that will help make creating a budget easier.

Let’s face it, budgeting can be a pain. Most people get too discouraged trying to get a budget to work. They spend hours trying to figure out how much to budget in each category and may even track every penny spent during the month only to find out that reality didn’t match what was budgeted. In these instances budgeting just seems like a futile theoretical exercise. There’s no follow up or reconciliation to tie one month’s budget to the next. Add to this the emotional issues that budgeting can trigger and your chances of maintaining a budget dive bomb. Many people who get to this point just give up and quit.

Steve Pavlina recently posted on his blog asking people’s opinions about what he should do with excess money (my term, not his). Congratulations to Steve for achieving such financial abundance. Steve is in the wonderful position of making significantly more money than he needs to live. We’re not just talking living below your means, but rather living below your means with a lot to spare. Once you’re in this position you can really use money to build a legacy. His question brings up an interesting point that applies not only to people with financial abundance but to even those buried in debt; where you spend money is a reflection of your values.

Occasionally a family member or friend will ask me how I manage my finances and how they can get started down a path of financial control and peace. Getting control of your finances can be a daunting task. Finances are one of the biggest sources of stress and can cause deep rifts in relationships. The fact is, there’s no quick fix when it comes to managing your finances. It takes time and must be done step by step.

One of the first steps of sound financial management is tracking your spending. Once you track your spending and are able to see where the money goes, it’s easier to attempt to control your spending. How can you control something when you have no idea what it is you need to control? The bottom line is, tracking your spending goes hand in hand with controlling it.